Small Businesses are Scrambling to Find Working Capital, According to New Q3 2016 PCA Results

Once a quarter, Pepperdine University’s Graziadio School of Business and Management and Dun & Bradstreet poll small and medium-sized businesses across the nation to learn more about those companies growth and access to capital. Despite steady increases in access to credit since 2012, when the study began, and an increase in demand for credit compared to the same time last year, small businesses are scrambling to secure working capital, according to the third quarter 2016 Private Capital Access (PCA) Index report. See more findings*, broken down by four major states and the national averages, below.

Nationally

For small businesses surveyed, 31% qualified for a bank loan in the last three months, while almost 100% of medium sized businesses surveyed qualified.

Over half of small businesses feel their ability to grow is restricted and 48% feel their ability to hire is restricted as well.

Yet, 59% of small businesses are in need of financing due to planned growth and 61% are planning to hire in the next 6 months.

As a result of this discrepancy in what businesses need vs. what they report getting, 33% of small businesses relied on various types of personal assets to fund their company, including: business credit cards – 63%, personal credit cards – 55%, and personal loans – 48%

New York

New York small businesses surveyed are feeling more restricted than other businesses across the country: 64% of New York small businesses and businesses surveyed nationally feel their growth opportunities are restricted, and 54% feel their ability to hire is restricted, compared to 55% and 46% nationally. (In Q1 2016, they were feeling equally restricted as the national average.)

New York small businesses are seeking financing above the national average (35% v. 29%) and have been receiving loans at a lower rate than the national average (17% compared to 36%).

California

California small businesses surveyed are on par with businesses surveyed nation-wide, planning to hire and grow within 1% of the national average.

These California businesses are also feeling restricted in line with the national average, with 56% compared to 55% nationally feeling their growth is restricted and 45% vs. 46% nationally feeling their ability to hire is restricted.

Unfortunately, the similarities end there. California small business are being awarded loans below the national average (24% vs. 34%).

Florida

Florida small businesses are feeling much more restricted than the national average: 61% feel their growth opportunities are restricted, compared to 55% nationally, and 55% feel their ability to hire is restricted, compared to 46% nationally

these negative feelings could come from a lack of bank loans: Only 32% of Florida businesses qualified for a loan in the past three months.

due to this lack of loans, 34% transferred personal assets to their business, compared to 31% nationally

Texas

Texas small businesses surveyed are both planning to hire and in need of financing above the national average – 69% of Texas small businesses are planning to hire compared to 61% nationally, and 64% are in need financing compared to 59% nationally.

These businesses may be in luck because those surveyed are qualifying for loans above the national average: 45% compared to 36% (in the last three months).

Despite better luck with loans, Texas small business owners transferred personal assets equal to the national average, with 31% using personal assets.